By Natasha Murray, chief client officer at media agency UM
Against the backdrop of ‘Awful April’ and the prospect of a global trade war, even more people could soon find themselves in debt. This can have severe consequences for mental health and is likely to hit young adults particularly hard – an audience that is already feeling stressed, lonely and anxious.
UM carried out a major piece of research called Money Talks – The Youth Tax, conducted with MoneySuperMarket and mental health charity CALM, to expose the harsh impact of the continuing cost-of-living crisis on consumers aged 18-24.
It paints a troubling picture of a generation under mounting financial and emotional pressure – exacerbated by the fact that financial literacy isn’t a compulsory element on the English school curriculum.
No surprises then that money is the topic causing young people the most worry in 2025 – ahead of social media, body image and relationships. One in five say that they worry about money multiple times a day, 51% are more worried about money than they were a year ago, and a quarter (27%) are in debt after resorting to credit.
Around two in five of those in debt say they owe £1,000 or more. And worst of all, one in ten of those in debt admit that they have experienced suicidal thoughts as a result.
And yet, the study also found that the pressure to keep spending is all too real: 38% feel they should spend more than they can afford to keep up with the lifestyles or influencers they see on social media, and more than half (52%) feel pressure from social platforms to buy things to ‘fit in’.
There’s no debate here: social media is encouraging consumers to spend beyond their means, contributing to a spiral of credit, debt and mental health problems.
The role of the retail sector
If you’re a retailer, you may be looking at these statistics and wondering what you can do about it. After all, people spending money is your business.
To look at it differently, tackling financial concerns head on represents a huge opportunity to differentiate and build trust among an audience of young adults with whom many retailers are struggling to bond. It’s a chance to build connections for the long term, by ensuring that the young adults of today are better educated about money and thus still in a position to be the loyal customers of tomorrow.
The study highlighted this very point. With young adults’ trust in traditional institutions and media falling away, it found that almost two-thirds (64%) believe brands have an important part to play in educating them on debt and credit scores.
And even though social media can have a negative impact on their relationship with money, it remains a key platform for that sort of education. Sites like TikTok and Instagram are young adults’ second most popular place to learn about financial topics, behind talking with friends and family.
What’s more, 47% wish that they could talk about their financial situation as doing so would improve their mental health.
This suggests that savvy retailers should start using their social channels as a place to help younger consumers rather than just as another channel for sales. If they go where their audiences are and offer opportunities for communication, they will be in a better position to build helpful, authentic communities as well as brand awareness.
Is credit the right call?
The first step may be a radical rethink of just how easy retailers are making it at present for young people to spend money they don’t have.
According to the survey, half have used Buy Now, Pay Later in the past year and a quarter have taken out a loan.
62% of young adults believe that financial and retail brands, in particular, don’t do enough to help young people understand the risks around credit – and only a third (35%) think brands are transparent about the potential risks and pitfalls of the credit options they offer.
In fact, more than half (56%) believe financial and retail brands tend to encourage young people to take on loans or credit. Four in ten say they’ve been targeted with adverts in the past encouraging them to take out credit options.
Time to encourage responsible spending
The moral – and commercial – case for retailers must be to develop longer-term growth by encouraging responsible spending through tailored messaging and services, particularly on social media.
Signpost the risks and consequences of bad credit decisions, be realistic and responsible in what is promoted to young people, and offer content and advice on money management in a way that is authentic to the brand.
Retailers have a key role to play, because they are rightly seen as the experts in the best ways to spend. If they can ensure that young adults’ relationships with money remain healthy, they can ensure that their own relationships with those consumers remain solid both now and in the future.
And, most importantly, they can help manage a mental health crisis that is threatening to overwhelm young people.
